Increase in property value

In theory, the increase in property value reflects the additional economic benefits that can be generated through improvements in legal certainty created by LAPs. The increase in property value from strengthening legal certainty and security of tenure is considered a benefit to society as a whole because it generates a value that did not previously exist.

The completion of the RCT process is generally associated with obtaining the document that grants the highest level of legal certainty, such as a registered title deed or a real folio. Under certain conditions it is equally possible that other LAP actions, which do not necessarily lead to a new title, will generate an improvement in the perception of security of tenure and this, in turn, generates an increase in property value. This can be the case with improving property information systems, updating the cadastre, or resolving disputes. As with the generation of value from titling (or other forms of property regularization), this must be confirmed and not simply assumed. As processes that generate property value are not immediate, a check must be made that progression times match reality. To confirm this information, household surveys are recommended which ask about the time of the LAP  results generation process and about factors that influence property value (see Module 4: Guide to the evaluation of LAP  impact at household level). It should be noted that increases in property value obtained from LAP  results (for example surveyed property vs. titled property) will not necessarily be of the same magnitude, and it is therefore recommended that benefits be calculated in relation to each form of regularization.

Construction of the flow of incremental net benefits based on property value

The flow of economic benefits related to an E-CBA which would evaluate the increase in property value is constructed as follows:

1. The progression over time is established of the physical goals linked to LAP results from which an increase in property value would be generated;
2. The increase is estimated in property value per unit of surface area (for example USD per hectare). See fact sheet on Increase in property value and Guide to carrying out household impact surveys;
3. The average surface area (for example in hectares) is estimated of properties which it is presumed will increase their value from the corresponding results of the LAP implementation;
4. The flow of economic benefits is obtained by combining the physical goals: (i) the increase in value per unit of surface area, and (ii) the average surface area of the properties.